The economy and stocks can be two different things

Discussion in 'Trading' started by jbtrader23, Jul 22, 2002.

  1. It doesn't take Miss Cleo to predict all these knee jerk responses from Washington about "the economy being sound" and with "low interest rates, low inflation and high productivity", we'll be fine.

    I hope the average investor out there can realize that the economy and stocks can go in two different directions for long periods of time. The economy was far better off in the late 1940's early 1950's than it was in 1929. Yet the DOW was still lower, and didn't surpass the '29 high until 1954.

    The same thing for the 1970's. Total GDP was higher in 1982 than it was in 1966, yet the market went nowhere during that time.

    Look back at our current example. Technology, productivity, total GDP growth, etc is higher today than in 1998, yet many of the market averages are lower than 1998 levels.

    When is the public going to wake up and realize that stocks can go down even while total GDP is rising? I wonder if all this Washington spin is going to backfire sometime and after blaming Corporate America for the ills of the market, they'll blame the cheerleaders like Dick Grasso, Greenspan, etc.
  2. exce26


    Economy is more focus on Fundamental.
    Stock market tends to focus on Trend.
    No matter how the economy fundamental looks good, if the stock market trend is downside & does not break the resistance level, the market will keep going down.....

  3. Bono


    It's not that they move in two different directions ... but rather that the stock market tends to lead the economy ... the stock market went down much earlier than we started hearing about Enron and the others, which actually came more than a year later ... and in the same way, when they ALL start admitting that the U.S economy have some serious problems and stop under-estimating it ... could we see the stock market heading up again ...

    Stop letting the economy tip you on the stock market direction ... it's the other way around ...
  4. God#9

    God#9 Guest


    The economy and stock market go the SAME way.

    However, most will believe the blatant LIES put out about the economy to try and sway confidence.

    i.e. look at how often job figures are revised? How often are these revised for the better?

    If you believe these you are no better of then believing abbey

    The economy is still more fucked then the stockmarket shows.